02415cam a22002657 4500001000600000003000500006005001700011008004100028100002100069245020200090260006600292490004100358500002000399520120400419530006101623538007201684538003601756690007101792690008101863700001401944710004201958830007602000856003702076856003602113w9157NBER20161209211306.0161209s2002 mau||||fs|||| 000 0 eng d1 aCarey, Kathleen.10aDoes Managerial 'Outsourcing' Reduce Expense Preference Behavior? A Comparison of Adopters and Non-Adopters of Contract-Management in US Hospitalsh[electronic resource] /cKathleen Carey, Avi Dor. aCambridge, Mass.bNational Bureau of Economic Researchc2002.1 aNBER working paper seriesvno. w9157 aSeptember 2002.3 aThis paper explores potential realization of gains by hospitals that are managed on a day-to-day basis by external organizations under formal contracts. It draws from the incentives literature, which postulates that managers of firms where ownership is separated from control will employ an input mix that deviates from cost minimization. While this status applies to hospitals generally, we hypothesize that specialized managerial expertise, coupled with the threat of non-renewal, will improve efficiency in hospitals that opt for contract. Secondary data obtained from the AHA Annual Surveys (1991-1998) are applied to examine the distribution of expense preference' parameters for all contract management adopters both pre- and post-adoption. These are contrasted with two control groups of hospitals drawn from the same years using propensity score methods. Results reveal allocative inefficiency among both adoption and control groups but a significantly lower change in the expense preference parameter pre- and post-adoption associated with a staffing. This suggests that changes in incentive contracts are one important strategy hospitals are using to cope with competitive pressures. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aD21 - Firm Behavior: Theory2Journal of Economic Literature class. 7aI11 - Analysis of Health Care Markets2Journal of Economic Literature class.1 aDor, Avi.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w9157.4 uhttp://www.nber.org/papers/w915741uhttp://dx.doi.org/10.3386/w9157